Readers' forum: Transatlantic relations

Our client is a US citizen who was UK resident under the statutory residence test (SRT) for the three years to 5 April 2017 but treaty resident in the US under Article 4 throughout on the basis of his US home family economic ties etc.

In 2016-17 he received a dividend from his UK registered company and we claimed full relief under Article 10(1) of the UK/US treaty. HMRC has accepted that our client is treaty resident in the US but is attempting to levy a 15% withholding tax on the dividend under Article 10(2).

We do not believe that Article 10(2) applies because our understanding is that it would only apply to US dividends beneficially owned by and paid to UK residents which follows HMRC guidance that:

‘The treaty allows both the US and the UK to tax dividends paid to a...